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July 14, 2014

Washington Health Policy Week in Review Archive 8a9df533-aa40-47b2-a45d-30d372b3f33f

Newsletter Article


Model Suggests Power to Bend the Health Spending Curve

By John Reichard, CQ HealthBeat Editor

July 10, 2014 -- Efforts to "bend the curve" in national health spending are likely to be strengthened by the kind of results released by CareFirst's Blue Cross Blue Shield plan last week.

The insurer said its patient-centered medical home program was able to lower 2013 costs for nearly 1 million enrollees by $130 million below projections. Over its first three years—2011 through 2013—it was able to save $267 million below projections.

Insurers claiming that they are using the model to save money is nothing new, of course. In effect, it's part of the way they market their services these days. It's also important to ask how realistic their projections of expected spending on the enrollees actually were in order to assess the savings results.

But the results drew praise from a high powered panel of independent experts at a forum on Capitol Hill. And the insurer says it is contracting for three different independent evaluations of its results by the George Mason Center for Health Policy Research and Ethics headed by former Clinton administration official Len Nichols; a team of researchers from Harvard, MIT, and Brandeis; and Westat.

The model described by CareFirst CEO Chet Burrell included the kind of payment incentives needed to persuade primary care to exercise much more care in what services they prescribe and who performs them.

The results were presented amid continuing hope on the part of budget analysts that much flatter trends in health spending seen in the past few years are going to continue, in part because doctors are beginning to pay more attention to the costs of the care and insurers are starting to figure out how to get them to do it.

The CareFirst model involves creating small teams of primary care providers called "panels" who are assigned a group of enrollees. The teams are given an annual target for total spending on the health needs of all the patients, not just for primary care but for specialists.

If care for the groups costs less than the target, the doctors and nurse practitioners on the team get a bonus. The bonuses are sizeable. A primary care doctor may get $30,000 more per year from the insurer. CareFirst said that on average the teams—typically of about 10 primary care providers—get an almost 35 percentage point increase in the fees they are paid if they meet savings targets, combined with points assigned for the quality of treatment.

The providers pick their own panels, akin to school children deciding who they want on their team in a pickup baseball game. Patients are assigned to panels based on who the providers involved have treated in the past year.

The insurer makes it easy for providers to track all of the care expenditures for the patients involved during the year. They also prepare complete "care plans" for selected patients with costly chronic illnesses the better to manage their conditions and control their costs.

Patients are incentivized to follow the plan because CareFirst waives deductibles. Also, the patients are monitored to see if they are getting the tests and screenings they need, with nurses playing a critical role in the process.

More and more doctors are involved in creating teams and in changing who is on their teams depending on the results they are getting, Burrell said. The providers "choose each other," he said. "They look at each other's performance."

Burrell said that initially teams of doctors and nurse practitioners were formed by the insurer through what amounted to be a matchmaking service but now they are more actively involved in organizing themselves. "We now have hundreds of panel meetings."

How is the insurer able to pay the doctors so much more and still save money overall? Because primary care providers are the gateway to other types of care, notably specialists. They also decide where the care will be delivered. By making referrals to efficient specialists and cost-effective sites of treatment, they can cut down sharply on overall health care outlays Burrell said.

Panelists at the event, including Nichols, Michael Chernew, and Marci Nielsen of the Patient Centered Primary Care Collaborative appeared hopeful that the model will have a significant impact. In 2011, the panels collectively saved 1.5 percent compared to a projected rise in medical spending for the year of 7.5 percent. In 2012 the savings were 2.7 percent and in 2013, 3.2 percent. The projected increases for each of 2012 and 2013 were a percentage point or two lower than 7.5 percent figure used in 2011.

Whether the trends will hold up over time and whether the model can be effectively applied throughout the health system remains to be seen. Policy analysts still voice considerable skepticism about the medical home model. And one of the factors that will be key to whether it spreads further is whether public and private health care purchasers unite in insisting that providers follow it. But it appears to be a model the policy community is intent on pursuing.

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Study Paints Upbeat Picture of Exchange Coverage

By John Reichard, CQ HealthBeat Editor

July 10, 2014 -- The rate of uninsured Americans has dropped considerably due to policies sold through health law insurance exchanges, and many new enrollees have used their benefits and are optimistic they can get the care they need, according to a Commonwealth Fund survey released last week.

"It is clear the Affordable Care Act is already helping improve the lives of millions of Americans," said Commonwealth Fund President David Blumenthal, M.D., who led the Obama administration's early efforts to promote the adoption of health information technology.

The survey also examined how much of the Medicaid population remains uninsured. The rate fell from 28 percent of people with incomes below the poverty level to 17 percent in the 25 states that expanded their Medicaid programs. In the 25 states that didn't expand their programs, the rate stayed fairly constant with 36 percent remaining uninsured.

The findings came from a survey conducted from April 9, 2014 to June 2, 2014. It was based on telephone interviews with 4,425 adults age 19 to 64, the Fund said, adding that the sample was representative of some 186 million adults in that age bracket.

By the beginning of June, 60 percent of adults with new Medicaid or exchange coverage said they had used their plans to go to a doctor or hospital or fill a prescription. Of those, 62 percent said they would have not been able to afford or gain access to this treatment before getting their new insurance. Eighty-one percent with new benefits "said they were better off now than before they had their coverage," according to the Fund's summary of the results.

It said the biggest coverage gains occurred among adults of ages 19 to 34 whose uninsured rate fell from 28 percent to 18 percent. The rate among Latinos fell from 36 percent to 23 percent. Among low-income adults it dropped from 35 percent to 24 percent.

The survey estimated that by the end of the health law's first open enrollment period there were 9.5 million fewer U.S. adults who were uninsured. The national uninsured rate among working age adults dropped to 15 percent, down from 20 percent in July-September 2013.

Sixty-three percent of adults with new coverage obtained on exchanges or through Medicaid were uninsured before they got their new benefits. Forty-three percent of adults potentially eligible for coverage had shopped on exchanges by early June of 2014, compared to 24 percent in December.

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Medicaid and CHIP Enrollment Now Totals Almost 66 Million

By Rebecca Adams, CQ HealthBeat Associate Editor

July 11, 2014 -- Federal officials announced late last week that 920,628 more people enrolled in Medicaid and the Children's Health Insurance Program in May.

Officials also admitted they'd previously overstated by more than half a million the programs' total enrollment in April.

The momentum in Medicaid and children's health coverage brought the total number of people in both programs to about 65.9 million people, according to a recent federal report.

That's about 6.7 million people more than the programs had in the three months before the federal open enrollment period started Oct. 1 under the health care law (PL 111-148, PL 111-152). That represents an 11.4 percent increase in enrollment. The estimate does not include Connecticut, Maine, and North Dakota.

More than half of the people in Medicaid and CHIP are children, according to the Centers for Medicare and Medicaid Services (CMS).

The estimates may change, however, when officials make the numbers final. CMS said that it had overestimated the number of people in the programs in April by about 583,752 people in a previous report. Updated estimates showed that in April, about 64.4 million people were enrolled that month. A previous CMS report inaccurately indicated that about 65.0 million were signed up.

While it is difficult to get a precise count of Medicaid and CHIP beneficiaries, the trends are clear. In states that broadened eligibility, enrollment rose by more than 17 percent when compared to the three-month average before Oct. 1. But in those that did not expand Medicaid, enrollment increased by a much smaller 3 percent.

CMS Deputy Administrator Cindy Mann in a blog post called on states to expand Medicaid.

"Increasing access to Medicaid coverage reduces the amount of uncompensated care provided by hospitals, lowers 'cost shifting' to businesses that see higher health insurance premiums (as some of the costs of caring for the uninsured are passed on to those businesses), and strengthens local economies," she wrote.

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Health Data May Create $300 Billion in Efficiencies, Study Says

By Kerry Young, CQ HealthBeat Associate Editor

July 9, 2014 -- With its potential to educate patients, spot fraud, and detect risk factors for disease, expanded use of digital health information, or big data, long has been considered a path to curbing growth in medical costs.

"Big data may have the potential to create approximately $300 billion annually in value in the health care sector, two-thirds of which would be generated by lowering health care expenditures," said Joachim Roski, a principal at Booz Allen Hamilton and coauthor of an overview paper in the journal Health Affairs that examines the promise of information technology and medicine.

The estimate weighs in how much could be saved as increased reliance on health data helps shape decisions about how to treat individual patients. It also looks at how using data about a patient can help in tailoring messages about healthier lifestyles.

The authors cited Veterans Health Administration efforts to launch a number of mobile health care initiatives that target specific patients and providers through the rapid collections and analysis of patient-generated data.

Looking at broad collections of patient data can reveal patterns that might have been missed by examining smaller groups.

"One example is the Durkheim Project, a collaboration between the Veterans Health Administration and Facebook, which is using real-time prediction software to analyze voluntary, opt-in data from veterans' social media accounts and mobile phones for suicide risk prevention," the authors wrote.

They noted that using more sophisticated data analysis, instead of manual documentation, was estimated to have recovered more than $4 billion for the Centers for Medicare and Medicaid Services (CMS) in 2011.

Privacy concerns will need to be addressed to get the greatest value of using health data, the authors wrote. High-profile leaks and breaches of data confidentiality have made many consumers question how well their medical histories can be protected.

"To realize big data's promise, health organizations and policy makers alike may need to set aside traditional mind-sets and embrace new approaches, overcoming barriers to promote data sharing with appropriate protections, and collaboratively working toward the goal of delivering better outcomes at lower costs," the authors conclude.

In the same issue, Centers for Medicaid and Medicare Services (CMS) Administrator Marilyn Tavenner and other agency officials present work being done at the agency to aid in what they call the "Big-Data Revolution."

CMS has been at the helm of the troubled launch of the health exchanges, which are a key feature of the 2010 health law (PL 111-148, PL 111-152). In the Health Affairs article, though, CMS gets a forum for discussing how that law altered its role and the technological changes it has made in recent years.

CMS, for example, has had a delay of one to two years in its generation of performance metrics. This was due to efforts to make sure CMS had collected all of the necessary data from providers of health care, including adjustments to the original claims.

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Blues Tout Moves Away from Traditional Care

By John Reichard, CQ HealthBeat Editor

July 9, 2014 -- Blue Cross Blue Shield plans said recently that one of every five dollars they pay in medical claims is for care that moves away from the traditional fee-for-service system.

The plans said their survey results from canvassing 37 independent Blues companies show they pay some $65 billion a year under programs that reimburse doctors and hospitals for higher quality and more efficient treatment.

Traditional fee-for-service payments don't vary by the quality or efficiency of care and are strictly based on the volume of services provided. While the newer forms of reimbursement still fundamentally pay according to how many treatments and services are provided, they do make adjustments for quality and efficiency.

The Blue Cross Blue Shield Association said in a press release that its plans contract with some 215,000 doctors under the more innovative payment arrangements. The figure includes 155,000 primary care physicians and almost 60,000 specialists.

Some 24 million enrollees in Blues plans are getting care through the arrangements, the association said.

Separately, the Department of Health and Human Services (HHS) announced plans to issue grants for "innovative care models." HHS said in a press release that that the grants are "prospective" and haven't yet been made final. The individual grants will vary between $2 million and $24 million over a three year period.

HHS didn't specify the total amounts of the new grants but said once they are made final, total grant funding for innovative models will reach up to $360 million. It didn't specify a time frame.

The grants aim to improve care for children, HIV patients, the frail elderly, emergency treatment, cardiovascular care, and telehealth and coordination of care in rural areas.

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Hobby Lobby Bill on Fast Track for Senate Action

By Melissa Attias, CQ Roll Call

July 9, 2014 -- Legislation designed to preserve women's access to birth control in the aftermath of the Supreme Court's Hobby Lobby ruling could see Senate action as soon as next week, after House and Senate Democrats introduce companion bills.

Sen. Patty Murray confirmed that the measure she and her colleagues are bringing forward is the bill that Majority Leader Harry Reid, D-Nev., has said he wants to act on this work period. 

The Washington Democrat's comments came after House and Senate Democrats and advocates unveiled the bills at a press conference. At the event, Murray said the Senate version has 40 cosponsors, but that no Republicans are on board. Rep. Diana DeGette, D-Colo., said she spoke with several Republicans about the House bill last week and is hopeful that some will sign on.

But after many GOP lawmakers put out statement's praising the high court's June 30 decision in Burwell v. Hobby Lobby Stores, it is highly unlikely that the bill will amass enough Republican support to pass. The Supreme Court said in a 5-4 ruling that the Obama administration cannot require "closely held" businesses with religious objections to provide free birth control coverage under the health care law (PL 111-148, PL 111-152).

That means the bills are likely to serve as a way to rally voters for the midterm elections and put lawmakers on the record on the issue.

"At Planned Parenthood, we are committed to mobilizing women across the country to help pass this bill and make sure that everyone knows where their elected officials are standing–whether they're standing for them, or whether they're standing in the way of access to basic health care," said Cecile Richards, president of the Planned Parenthood Action Fund.

The bill would prevent employers from refusing to cover contraception or any other type of health coverage guaranteed under federal law for their employees and dependents, according to a summary. It also would maintain that the Religious Freedom Restoration Act (PL 103-141), which was at the center of the Hobby Lobby challenge, and other federal laws do not allow employers to decline to comply with the health law's requirement.

In addition, the bill would maintain the administration's exemption for churches and other religious institutions and the workaround that prevents religious nonprofits such as hospitals from having to directly arrange or pay for the coverage.

Murray said the measure does not amend the Religious Freedom Restoration Act, but lawmakers suggested that they could address the law in future legislation. DeGette noted that House members are looking at the longer-term issues but wanted to join the Senate now with a targeted fix.

"I think it's essential that we look at that, but first things first," added Sen. Barbara Boxer, D-Calif. "We're being very pragmatic here. We want to make sure that women are treated equally."

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